Buying a new bike with a $200 budget constraints

I guess I'll start off by admitting that I haven't touched a bike in about 6 years. It wasn't entirely a conscious decision as I had relocated to the middle east a while back and it was just hot as hell out there. Well, now that I'm in uni and need a more efficient mode of transportation, I've contemplated getting a new bike. This video sealed the deal:http://www.youtube.com/watch?v=D4iU-EOJYK8

Hence, I have a few questions:

1- Is it possible or advisable to use a road bike for casual mountain biking?

2- Where can I buy a decent bike in Toronto? I've currently set aside $200 and I was dead set on buying the bike below from Canadian Tire, though a friend of mine strongly suggested that I refrain from doing so, and instead suggested that I go to a bike shop and buy a $700 bike.

1. A road bike won't do very well on mountain trails. Maybe a cyclo-cross is what you're looking for or a hybrid.
2. Your friend is right, don't buy a bike from CT; it's just wasted money. You will need to spend at least $500 to get a decent bike unless you buy used.
3. Stores:http://www.ridethecity.com/toronto

You can also buy a decent used bike for $200. Or get one for $150 and have some cash leftover for repairs and new parts.

It takes some work, looking on Craigslist or Kijiji and finding something decent that isn't a ripoff. If you have some knowledgeable friends they could help, or perhaps a bike forums Torontonian has something decent they'd like to sell?

It's summer, check the garage sales. Keep an eye out for bike brands you see in bike stores, not in CT or Walmart. As for "casual" mtbing, I'd say cyclocross at a minimum, but if you want to jump logs and do drops, you might want a mtb instead and just swap slicks for knobbies as needed. If you look at the CT mtb's, there's a sticker on the top tube that says, "Not for offroad use" or something to that effect.